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. Last Updated: 07/27/2016

Fears Over French Trade Union Strikes Weaken Franc

LONDON -- Widespread trade-union strike action against the French government's welfare reforms sent the franc reeling Monday, and worries over the strikes' deepening impact also hit European share markets.

Paris stocks closed more than 2.5 percent lower in moderately active trading, depressed by the franc's weakness, spreading social unrest and indications of slower economic growth.

The franc struggled back from an early low of 3.4850 per mark on profit-taking, but in late European trading it was nearly two pfennigs weaker than at Friday's close at around 3.4755 to the mark.

Dealers saw little respite for the battered franc and many predicted it would weaken below 3.50 to the mark, possibly forcing the Bank of France to raise interest rates despite the slowing effect this would have on the already sluggish economy.

The French cabinet was holding an emergency meeting Monday evening to discuss the mounting confrontation between the government and trade unions.